By: Dan Hueber –
This will sound like a familiar theme, but it would appear that the grain/soy markets remain in an overall holding pattern as we await government reports and news from the U.S./Chinese trade discussions. You are probably tired of hearing this and to be perfectly frank, I am tired of writing about it. We might as well get started with the trade estimates for the reports this Friday, which break down as follows; Corn acreage is expected to come in at 91.3 million acres, beans at 86.2 and wheat 46.9. March 1st corn stocks are estimated to sit at 8.317 billion, beans at 2.702 billion and wheat at 1.551.
This is not to say that the market is not becoming more and more concerned with the current weather situation here in the United States, but understandably, no one is in a panic mode at this early date. Corn planting in Texas reportedly reached 38% over the weekend, which was up 12% for the week but remains 17% behind last year. Corn emerged stood at 12%, which is 5% behind a year ago.
According to Safras & Mercado, the bean harvest in Brazil has reached 68%, which is now just 3% ahead of last year and 4% ahead of the 5-year average. Wet weather has slowed progress. Dr. Cordonnier left his estimate unchanged at 113.5 MMT for another week and holds a neutral to slightly higher bias moving forward and kept his corn estimate at 93.5 MMT, also with a neutral to higher bias. The earliest bean harvest is just getting underway in Argentina with slightly better than expected yields. Dr. Cordonnier is currently projecting a 54 MMT bean crop for that nation and bumped his corn estimate higher by 1 MMT to 46 MMT. The corn crop is estimated to be 8.5% harvested with solid yields being reported.
A quick update on the crude oil market. Brent futures are attempting to push higher again in the early week trade, but so far, we have not been able to extend through the 50% retracement and into higher highs for the swing. Indicators are just reaching the overbought zone but continue to point higher so no confirmation of a peak just yet. That said, the end should be drawing near for now so if you have not forward purchased spring fuel needs, I would suggest to hold off for now.
